They will make a goal in iraq for all u. S. Troops to leave the country. Kathleen president troop President Trump warning of u. S. Strikes if u. S. Troops are hit. The Market Reaction around the world, starting with australia which is open. What are you seeing . ,ophie the s p fell the most sydney futures are the very slightly up. The dollar is under pressure. The aussie dollar being weighed against falling against the yen which remains on the front foot, trading at the strongest double since october, 107. 78. Japanese stocks are set for losses. Tokyo markets back after a long break with pmi do from japan. Resumee treasury to trade in tokyo online. Caution as we return, looking at aussie bonds, the yield curve flattening with the 10year falling five basis points in australia and risk aversion took its toll on middle eastern markets. Lets look at that damage report. All major benchmarks tumbling. Aramco settled at the lowest closing parts price since listing. Oil prices, seeing brent and wti continuing to move higher, jumping more than 1 . Lets get you to first word news. Su we start with reports from beijing which say the vice premier is prepared to leave lead a treat team to washington a trade team to washington for signing of phase one. They will fly next monday ahead of the ceremony on january 15. The paper says china was not expecting President Trump to make a unilateral announcement about the date. Australia has suffered the worst weekend since the bushfires broke out last year. Dozens of communities in New South Wales and victoria have been destroyed. High wind and temperatures to blame. Conditions are set to worsen once again this week. At least 23 people have died and half a billion animals have been estimated to be killed. Carlos in japan say ghosn share his escape plan with two americans who worked in private secretary. Im and security. One was a former green beret who also served time for fraud. The manifest for the getaway flight doesnt name carlos ghosn but includes passengers named eckel taylor and george and one. Arrest,years after his Harvey Weinstein is facing court. His criminal trial on five felony counts including predatory sexual sell and rape is scheduled to begin later monday in manhattan. Jury selection could last up to two weeks with the trial itself lasting six weeks. Accusations triggered the Metoo Movement and a torrent of similar claims against other men. Global news 24 hours a day on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. I am su keenan. This is bloomberg. Kathleen the fallout of the killing of the iranian ternium general is mounting. Iran says it will not abide by the 2015 nuclear deal and iraqi lawmakers demand u. S. Troops leave the country. President trump said he identified 52 sites which will be hit if iran retaliates and that it could be very fast and hard. Now to washington and ros krasny. The escalationhy seems to continue. And it certainly does dont expect to see a war of words with President Trump, who never likes to not have the last word, hitting back in quite strong fashion. Seemed like a flip was switched over the weekend. President trump said we didnt take out the governor the general to stop a war. By saturday he was talking about these 52 targets. On sunday was talking about doing things that were not proportional should iran hit a u. S. Target. Pretty aggressive commentary from the president and backed up by michael pompeo. Bound by thenger nuclear deal. They want to kick out u. S. Troops from iraq. It seems like it is nonbinding given the Senate Resolutions we sometimes see in washington that have no real binding. But nonetheless it is a troubling turn of events. Saw President Trump tweeting from his florida resort. He is now in d. C. What to expect from him on how this sets up his week . Beenthe president has focused on the impeachment investigation. That is still around. Democrats and republicans are still wrangling over how the impeachment trial will go and when nancy pelosi will send the articles of impeachment over to the senate. That could shape his week. Ofxpect you will see a lot meetings and pronouncements even of thepresident out white house. He has lunch scheduled monday with mike pence. He is definitely going to bring his closest advisers towards him. And to monitor the next steps out of the middle east, he is obviously dead set on retaliation if need be. That puts the ball back in irans court. Democrats have been complaining the president shouldnt should have gotten their authorization but some say he didnt need to. But he seems bent on moving. Elizabeth warren on sunday, he lied this to how about ukraine, seems like it is being politicized. Ros there has been a tremendous amount of talk about the whole wag the dog phenomenon when it comes to President Trump. Democrats have cast a lot of doubt about the retroactive notification they were sent by the white house saturday evening. Nancy pelosi said it created more questions than it enters answered. Democrats said the u. S. Is not safer based on trumps actions and dont want to see this administration bumbling into war. We think about trumps refrain, he said it on twitter, got to went the endless wars the u. S. Is involved in, this is a step in the other direction. There are questions about what his motivations were, is it really true to say there was an imminent threat, and maybe there is a credibility track gap because of the rhetoric he has used in the past, what people characterize as outright lies. Time indeed. Ling thousands of u. S. Troops are heading towards the middle east and the next steps are pretty uncertain. But definitely at the time of maximum rhetoric. Much. En thank you so our editor joining us with her insights are you know lets get back to sophie for a look at the markets, in light of the concerns which are growing over iran. Pricing for more volatility. Futures dipping this morning while the yen is on the advance and gold is jumping. A six year as auctions indicate more gains to go for burley and to go for gold. 1 , similaruch as for brent. We have brent fighting the 70 handle this morning as we see hedge funds turning more bullish on crude. That rally in oil, they see the risk premium which is giving what we saw for Oil Prices Last year, kathleen. Kathleen thank you for that dynamic update. With the escalating tensions which seem to have moved the goalposts for 2020 equity forecasts, lets discuss that with the Asia Pacific Investment strategist in hong kong. It is kind of interesting we going into 2020 excited about making progress in the u. S. Trade deal and tariffs going to be rescinded, now the middle east is exploding. Where does this leave risk assets . Event that have longterm implications for geopolitics. It is meaningful for the people who are involved. But for the Global Economy and Financial Markets, the impact might not be as longlasting as it might seem on the outset. We looked at the major geopolitical events of the past since world war ii. And on average we see 4 decline initially. For the s p 500. Than a month later the effect is kind of erased. 11, if you take september that is the event that set off a chain of reactions that lead us here today. We had a 12 decline initially and a month later we are up. Partiesmpact of the involved like the u. S. , like saudi arabia, will be deeper. Theasia, the impact from iranian issue is not going to be as big as those in the u. S. You are upbeat on china and its economy. What is driving that . China is in a longterm struggle to restructure its economy. Economic slowdown is a trend. However last year what we have seen is a significant slowdown. N trade and investment all of that, part of it is driven by the trade war, some of it weaker demand. Both of those things are likely to give us rebound in 2020, when we have the phase one deal and all we are looking for is no additional tariffs. That is good enough for the more optimistic view. The second aspect is forecasters, economists are still expecting a slower or worse economy in china in 2020. That is a sentiment that is going to turn around in the shortterm. I would expect the chinese economy to perform as well as last year or whatever better. Seei is this the year we domestic politics matter when it comes to hong kong equities . We have seen the macro feature deteriorate. Not expecting an improvement. Retail sales have been awful. The situation is so entrenched. Does it start flowing onto Capital Markets . You are right. The Capital Market to death reaction to escalating tensions has been muted. We reached a bottom during the airport protests. So now what we are seeing is that china is taking a longer term approach. There is no real threat of external, forceful action. Is tok the approach here manage longterm economics and angst, touce popular try to improve the situation. That is going to anchor potential Financial Markets as well. As long as the Financial System remains intact, and for the economy can rebound, the first part is trade. That is going to go with how the rest of the region does, given the phase one deal. The second is probably going to be retail, once the protests the new normal. Get used to the new normal. Haidi it is looking like a year for 2020 to be less driven by Monetary Policy given most, if not all, Central Banks have done what they need to do. It is looking back at transmission. What is the major driver with trading impetus and are there any sectorial stories you like . EasingMonetary Policy that was put in place last year is going to have more effect this year. It is always a bit of a delay. Authorities,fiscal the people spending the money, is kicking in stronger. You are seeing that in china, india. He philippines youre seeing a lot of these big countries in asia. The two of them together is going to give more take on the Economic Activity front. Better . Tors will do first and foremost is consumer. Consumer cyclicals and discretionary type of sectors. Last year we turned more positive on oil. That has done well. There is more kick to that. Well, it willr as do fairly well. For a short time, the value of materials, energy and industrials will also do well but i dont think it has that much sustained growth in it. Heareen we are happy to you are looking for a strong consumer helped by their steps. The asiapacific investment strategist, thank you. Dozens of protesters are arrested in hong kong. We will see white anger why anger is rising against parallel trading. Haidi the outlook for macau casinos. They talk about when it is most pleasant. This is bloomberg. S bloomberg. Kathleen this is daybreak asia. I am kathleen hays. Haidi i am haidi stroudwatts. China is planning to send a delegation for the signing of the phase one trade deal to washington. Happy news for investors to start of the year. This is the South China Morning Post reporting that the trade delegation is going to to sign offext week on this deal. They were taken by surprise not for the first time by a tweet by President Trump on new years the signing stated ceremony will take place at the white house january 15. They had something of a huddle to decide they would then if they would postpone the planned trip, expected to be flying earlier. They did agree to do that and they are trying flying out. The signing ceremony is expected to take place on the 15th. On chinese delegation return the 16th. They are led by the vice premier who has been at the head of these negotiations throughout this process. We are waiting for details what exactly this deal will contain in terms of precise details. The agreement hasnt been publicized or published. We know the Broad Strokes in terms of agreement by the u. S. To pull back and reduce tariffs on chinese goods in exchange for chinas commitment to purchase Agricultural Products and keep and haverrency stable stricter intellectual property laws and legislation. President trump saying he is planning to eventually at some point line to beijing to fly to beijing to start phase two. Some say take it with a pinch of salt given those were very coveted issues on which structural issues, china will not give ground if at all. Replaced onena has of the top officials. He is a strong man, at a time when there is still a lot of support for prodemocracy protesters. How will this work out . With very is someone little if any Foreign Relations experience, very little experience with hong kong. What he does have you is on track record of implementing beijings policies on the ground. He was the Party Secretary of the province of someone who implemented quite effectively and Anticorruption Campaign effectively an Anticorruption Campaign. He is seen as a strong loyalist, the yes men. What it signals to those as thoses, demonstrations continue, it signals beijing is showing no willingness to back down. They want to see law and order reinforced in hong kong. He is taking over from someone who was expected to step down. There was a lot of speculation how long he would hold on to this position given the missteps and very damaging, the local money inns which took beijing high surprised when hong kong citizens voted for and against persia probation parties. We will have to see what he does in terms of implementing policies to see if it changes. Kathleen it could be another chapter in this saga. Tom mackenzie joining us from beijing. Now we go back to sophie and hong kong for stock movers early. Who is leading the pack . Sophie i want to talk about what is on the decline, qantas falling after canceling flights aze created by h the bushfires. This one rising 2 as bullion, having a solid start to 2020, extending gains. Looking at a rise for gold which has climbed 2 as i hit at the highest level in six years earlier across 88 an ounce level. Palladium seeing a jump this morning, extending its record to cross 2000 and out after it had an ounce after it outpaced Precious Metals. This is bloomberg. Haidi a quick check of business flash headlines, tesla delivered a record 112,000 vehicles in the Fourth Quarter and is predicting growth in china after beginning battery production at the end of december. It says it will be able to triple production at its shanghai plant to 3000 cars a week. The stock is storing to an alltime high friday. It is near and 18 billion market cap, almost double. Kathleen mercedes going to recover three quarter of a million cars because of faulty sunroofs. The issue affects several models. 2011,between 2001 and saying the glass panel could deteriorate and lead to it breaking free. The recall is expected to begin february 14. Happy island wednesday. Valentines day. Haidi the ousted chairman will not seek a return after winning despite winning a legal case against the country. He wished to be reinstated but now he doesnt wish to return in formal capacity. The family owns 18 of the company. More analysis on the iran tensions. This is bloomberg. Rg. We wake up to a dangerous moment in politics. Couldnt have been worse. I am not sure he understands the applications of what he has unleashed. The game has changed. The military calculus has changed. The markets are coming down to effective deterrence. Seeing this in the context of what has been a series of iranian aggression. The overriding sentiment is uncertainty. Increasing uncertainty. There is a lack of really knowing exactly what iran is going to do. Conflict with out lots of trouble. Very strong conditioning over the last few years which is to take these shots. For Global Markets you need like to have a global war. To see that in china, we backed iran up. We cant know what is going to happen in the middle east. The current overnight events in iraq i think are certainly a question. It adds to the uncertainty. Some guests weighing on the impact of the killing of the iranian general qasem soleimani. We are seeing that in the commodities space, gold extent fridays advance to rise above the six year high for both spot and futures prices. Seeing haven demand spurring appetite for gold. Options markets seeing extended rally for gold as well. In the oil space we saw a jump of 1 . The beauty i easing gains after topping 64 barrels dollars a barrel while brent is eyeing the 70 handle right now. We are seeing the yen maintain its advance, firming up the low 108, trading at the strongest level since october while s p is under pressure early in the asia session. Treasury futures taking higher. We are waiting seeing haven demand already playing out. The 10year yield falling as much as six basis points. Haidi lets take a quick look at the impact implications, tensions on the oil market. The president of Energy International joins us. Great to have you with us. We have seen tensions between the u. S. And iran previously, they have had a shortlived impact on the oil market. There is a great deal of unpredictability which i think prevents most experts from being able to say what they think will happen. Does it feel like a longerterm issue for markets . Exactly. I remember we had the discussion made at the market open after the saudi aramco attack in september. We were discussing and i have mentioned you dont think it will be a longterm or high risk premium. The reason was the market at that time, market looked clearly understood the magnitude of the disruption from saudi arabia and had approximate estimates of when saudi production could be restored. The current tension you are talking about, it is the beginning of the game. No one is sure what will be theys retaliation and how affect each other. Wet we think is potentially call the risk premium, it could be something that even could go even higher and stronger than the attack from september last year and for a longer term. Is it within the realm of possibility or likelihood that iran would target oil assets as one means of retaliation . We dont think they will start with